When is the US ADP jobs report and how could it affect EUR/USD?

US ADP jobs report overview

Wednesday's US economic docket highlights the release of the ADP report on private-sector employment, scheduled at 13:15 GMT. Consensus estimates suggest that the US private-sector employers added 207K jobs in January, marking a sharp decelerating from the 807K reported in the previous month. The report might influence expectations from the official Nonfarm Payrolls (NFP) report and help predict how things could move on Friday.

How could it affect EUR/USD?

Ahead of the key release, a stronger Eurozone CPI print pushed the EUR/USD pair back above the 1.1300 mark amid the prevalent US dollar selling bias. Given that Fed officials have downplayed the prospects for a 50 bps rate hike in March, a weaker ADP report would keep the USD bulls on the defensive and provide an additional lift to the pair. Conversely, a stronger print might do little to influence the Fed's policy outlook or provide any meaningful respite to the buck. This, in turn, suggests that the path of least resistance for the pair is to the upside, though traders might refrain from placing aggressive bets ahead of the ECB meeting on Thursday.

Meanwhile, Eren Sengezer, Editor at FXStreet, outlined important technical levels to trade the EUR/USD pair: “ the 200-period and the 100-period SMAs on the four-hour chart form stiff resistance at 1.1320 before the pair could target 1.1340 (Fibonacci 61.8% retracement).”

“On the downside, 1.1260 (Fibonacci 38.2% retracement) aligns as first support. If this level turns into resistance, additional losses toward the 1.1210/1.1200 area (Fibonacci 23.6% retracement, psychological level) could be witnessed,” Eren added further.

Key Notes

  •  EUR/USD: Options market turns most bullish in 10 weeks

  •  EUR/USD Forecast: Unconvinced bulls may soon give up

  •  US Dollar Index extends the downside to 96.10 ahead of data

About the US ADP jobs report

The Employment Change released by the Automatic Data Processing, Inc, Inc is a measure of the change in the number of employed people in the US. Generally speaking, a rise in this indicator has positive implications for consumer spending, stimulating economic growth. So a high reading is traditionally seen as positive, or bullish for the USD, while a low reading is seen as negative, or bearish.